ESG - ENVIRONMENTAL, SOCIAL, GOVERNANCE (14 marks short answer, 9 marks multiple choice) Flashcards
Identify what ESG is
Set of practices and metrics used to evaluate a company’s impact in three areas
E = Environmental
Energy use, GHG, water use, pollution, waste, materials, encroachment on nature
S = Social
Labour practices, human rights, employee health and well being, diversity, equity and inclusion, impact on community, impact on customers
G = Governance
Companies management, decision making processes, internal controls/audits, board government oversight, executive pay, shareholder rights, transparency
Identify and discuss how ESG impacts business
- Directly impacts a business ability to operate
- Allows business to be evaluated on factors other than just financial performance
- Incorporates financial and non financial issues involved in managing business more holistically, comprehensively, and long term
- Acknowledge that business relies on society and environment
2: Allows business to be evaluated on factors other than just financial performance
Externally → investors/lenders/financial markets, employees, government, suppliers, customers - influencing reputation
Internally → management
3: Incorporates financial and non financial issues involved in managing business more holistically, comprehensively, and long term
- Changes how risks and opportunities are measured and managed
- Allows companies to show stakeholders that they are mitigating risks and planning for a changing future
Planetary boundaries
9 boundaries in which human can continue to develop; if boundaries are crossed/abrupt unchangeable environmental damages can occur with serious consequences for human kind
Science-based targets
corporate targets to mitigate GHG emissions that are inline with the latest climate science says in necessary to meet the goal of paris agreement
Just transition
greening the economy in way that is fair/inclusive to everyone concerned, creating decent work opportunities and leaving no one behind
Sustainability
meeting needs of the present without compromising ability of future generations to meet their own needs
Sustainable development
integrated approach that takes into consideration environmental and social concerns along with economic development
Green financing ⇒
financial flows (such as lending, equity positions, or underwriting and advisory services associated with zero or low-carbon assets or activities)
Grey financing ⇒
financial flows toward activities and technologies that contribute significantly to GHG emissions
Greenwashing ⇒
the act of making false/misleading statements about the environmental impacts of a product or practice
Greenhushing ⇒
a practice where companies underreport or withhold information abt their environmental efforts/achievements; due to fear/criticism, skepticism, desire to avoid the spotlight until great results are achieved
Carbon neutral ⇒
any CO2 released into atmosphere from a companies activities is balanced but an equivalent amount being removed
Net-zero ⇒
activity that releases NO carbon emissions into atmosphere
Nature positive ⇒
an approach that enhances ecosystems, our planet and our societies (instead of simply doing less harm)
Decarbonization ⇒
a process by which countries, individuals or other entities aim to achieve zero fossil carbon existence
Adaptation ⇒
adjustments in the ecological, social or economic systems to actual expected climatic stimula; and their effects/impacts
Mitigation ⇒
a human intervention to REDUCE emissions or enhance the SINK of GHG (sink = any biological/technological process, activity, mechanism that REMOVED GHG from atmosphere)
Within the development and evolution of the ESG movement: key takeaways
Many companies still treating ESG measures as acts of compliance, altruism are corporate responsibility
Risk
stakeholders holding companies to account, as without a habitable planet
